World Bank, ARTF support financing for micro and small enterprises in Afghanistan

The grant will support the Empowering Microfinance and Enterprises for Resilience and Growth (EMERGe) Project and will be provided directly to the Aga Khan Foundation USA.

A grant in the amount of $16 million from the Afghanistan Resilience Trust Fund (ARTF) has been approved to support financing for micro and small enterprises in Afghanistan, with a focus on women and women-led businesses.

The grant will support the Empowering Microfinance and Enterprises for Resilience and Growth (EMERGe) Project and will be provided directly to the Aga Khan Foundation USA.  

The project will help revive microfinance providers active in Afghanistan by clearing their balance sheets of old loans that cannot be repaid due to economic conditions arising after August 2021. This will help increase their liquidity so they can provide new financing to micro and small enterprises. The project will also provide technical assistance to the microfinance providers to strengthen the micro-finance sector, digitize business proceses, and train staff to prioritize lending to women and women-led businesses.

“Supporting micro-finance providers in Afghanistan is one of the few viable options at this time to promote access to finance in Afghanistan, especially for women,” said Melinda Good, World Bank Country Director for Afghanistan. “This project aims to strengthen the microfinance sector in Afghanistan so that small business owners and women-led businesses can access the credit they need to rebuild their businesses, rebuild their lives, and help revive the private sector.”

The project will also provide business development services that focus on building a pipeline of bankable micro and small enterprises and enterprises that proactively create jobs for women. These services will help women-led small businesses transition from informal savings groups to formal credit channels.

The project will also establish a Credit Viability Fund (CVF), implemented by the Agha Khan Foundation USA’s Office in Afghanistan. The CVF will help eligible micro, small and medium-size enterprises that have benefited from the business development services to access formal financial channels.

"The EMERGe project was developed af